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Industry Trends for 2015


With the recession now in the rearview mirror, the automotive industry appears to be continuing its upward climb. Car sales are at a steady high and vehicle production was still on the rise at the end of 2014. Those who were forced to tighten their belts to survive some of the economy’s worst days are now reaping the benefits and flourishing in today’s market.

AE Magazine spoke with 20 of the industry’s top executives about trends they will be watching in 2015 ­– both in the automotive industry and specifically in F&I. They shared their thoughts and predictions about the economy, products and technology, F&I operations, and the growing impact of Millennials on the auto industry. Read on to learn what they had to say.

The Economy

There are a few shared views among our executives; at the top of that list is the 2015 economy. Some have concerns about the possibility of rising interest rates in the third and fourth quarter, but to one degree or another; most are optimistic about the 2015 outlook. The 2015 economy is generally expected to be robust, following on from the strong momentum of the fourth quarter of 2014.

Kelly Price, president, National Automotive Experts, says, “The major indexes that we pay attention to are oil prices, housing (new construction), interest rates, Dow and NASDQ; all of these lead to more relaxed consumer spending. Year-over-year growth is anticipated as all signs point to a strong and sustainable 2015. Assuming all of this stays positive, the auto industry should follow suit and have a strong year.”

Garret Lacour, CEO, RoadVantage, also expects the economy to continue improving ­– driven by job creation, increased wages and lower fuel costs. “These factors will drive more consumers to showrooms. Several brands set new sales records in 2014, and that momentum will continue into 2015.”

Jerry Biller, president, EcoProProducts, believes all indications point towards a solid 2015 in both the financial and the automotive sector. Mentioning the decrease in unemployment, Biller expects 2015 to be a record year for new and used automotive sales, with more sales transactions this year than ever before.

Oil defines this year’s economy according to Steve Rosenvall, CEO, Alpha Warranty Services Inc. “The economy is driven in large part by natural resources. It’s important to keep an eye on these issues as they arise. Oil and the auto industry are attached at the hip. The economy is seeing some good gains and will continue to through 2015. Lending institutions are continuing to lend money and they are getting creative to help many afford the vehicle of their choice. Many large banks and local banks are posting some of the best gains they have seen in years. “

Bill Gorra, president and CEO, Simoniz USA, Inc., is also among the optimists. He believes the table is set for a prosperous 2015, due to factors such as gas prices, little or no inflation, low interest rates, historical market highs, and record car sales in 2014. He says the stars are aligned for the automotive industry to have a great year. “There should be ample inventory with a wide spectrum of alternatives for the consumer. I believe there is still some ‘pent up demand’ and a lot of older cars on the road that need to be replaced.”

With the increasing availability of credit, Scott Karchunas, president, Protective Asset Protection, expects modest growth in automotive and GDP growth at or about 3%. “If interest rates were to rise modestly in 2015, any negative impact should be minor and potentially offset by the benefits of higher rates to savers.” Additionally, he sites a strengthening economy and labor market combined with lower fuel prices, a low interest rate environment and increasing credit availability as signs that the automotive industry will have another year of modest growth ahead.

Barring any major geopolitical upheaval or a premature monetary response from the Fed, John Luckett, senior vice president of sales and marketing, The Warranty Group, also expects to see 3% growth. “This supports NADA’s forecast of 16.94 million new cars and new trucks to be purchased or leased in 2015. This forecast is based on an economy that has continued low interest rates, rising employment and wages as well as lower gasoline prices.”

Rising Interest Rates

Those with concerns about what the 2015 economy holds cited rising interest rates, international turmoil, and a slowing stock market.

Should the Fed raise interest rates mid-year as it has suggested, Robert Steenbergh, CEO, US Equity Advantage, LLC, believes we could see a general slowdown in the economy; less of a bull market, and an overall wait-and-see approach in the near term from both businesses and consumers. “Automotive will follow suit. With interest rates exceedingly low, consumers will want to buy now before the anticipated mid-year rate increase. How much of a drawback that has on auto sales will depend on how high interest rates go and the total impact it has on the consumer’s overall budget, since rates affect everything from housing and credit to student loans.”

Also on the more cautions side, Tony Wanderon, CEO, National Auto Care, sees the US economy in 2015 having some challenges. “From a growth perspective, I see good results for domestic companies who have very little or no distribution overseas. With the recent strength of the dollar, exports will be a challenge and profits will drop as well. For companies importing into the US, such as Toyota, I see some big profits and aggressive incentives to increase market share. From the energy side, what goes around comes around. I could see gas getting below $1.50 a gallon. That will drive pick-up and SUV sales, then a rapid rise in oil and gas pricing would put pressure on disposable income and drive residuals down dramatically. If you combine that with the return of aggressive lending and the return of normal interest rates, we could see some real pressure on the industry and overall economy in the third to fourth quarter of the year.”

Chris Kerby, president of sales and marketing, Innovative Aftermarket Systems (IAS), thinks 2015 will start as a stellar year, but also has some concerns. “With low fuel prices, turmoil in the Middle East and so many countries like Russia and China going into recession, I think you are going to see some pressures that will affect the economy in many ways. One thing is certain – interest rates are going to go up and in turn, the stock market will slow.

“From an F&I/dealership perspective,” Kerby continued, “I think you will see changes. When times are good, dealers can get loose and experiment in certain areas. F&I is running historically high and not for everyone, but for many, it is not because of their skills. It is because the average carry is the longest it has ever been – finance terms are the longest they have ever been and rates are low. That all changes when the market slows down and interest rates go up. It will be a different ballgame when rates get above 5%. When interest rates go up, what we know as the highest F&I profitability in the history of the car business, as far as income per retail, will be significantly affected.”

But according to Jim Smith, CEO, SouthwestRe, the industry is nearly back to “the good times” of 2000 when there were 17.0 million in sales. Smith pointed out that many businesses were forced to streamline their operations in order to survive the leaner times of years past. The businesses that survived those lean years are now reaping the benefits of their improved efficiency and the elimination of excess spending. And Smith says they are stronger now because of it.

TRENDS TO WATCH:

There are many trends our executives will be watching this year. From trade-ins to technology, and consolidation to the CFPB, there is no doubt there will be a lot worth keeping tabs on in 2015.

Tony Wanderon, CEO, National Auto Care, says, “We could see pressure on margins from start-ups looking to become disruptors in the auto-lending arena. I could definitely see a major lender or credit union put a big push on going direct to the consumer. I think dealers and agents will finally say enough is enough and stop doing business with companies who directly compete against them, such as the recent trends of F&I providers selling cars, refinancing or directly selling vehicle service contracts to consumers.”

Among the trends Steve Amos, president and CEO, Gulf State Financial Services (GSFS), will be watching “is the possibility of selling F&I products on dealer websites. There are dealers experimenting with this and having some success. The key to this possible new process will be to identify who will be selling F&I products and make sure they are compliant and know the benefits of the products.”

The Return of the SUV

Bolstered by the 2015 Ford F-150 and GM’s reentry into the small truck market, Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., expects to see truck sales grow at a faster pace than automobile sales. He predicts domestic growth will outpace foreign competitors, but only slightly. “The industry leaders, both foreign and domestic, finished 2014 strong and will continue that momentum into 2015.”

John Vecchioni, national sales director, United Car Care, is looking forward to wonderful opportunities in the year ahead. “With the large drop in oil prices, I think we will see more SUVS and trucks because people won’t be as concerned about vehicle operation costs as fuel prices decline. Smaller vehicles will see a downturn in sales.”

Vecchioni predicts the increase of trucks and SUVs in the marketplace will result in a demand for customized products for these vehicles. “These type of vehicles are used differently to smaller, commuter cars; there is much more wear and tear, they have four wheel drive, and new electronics.” He expects to see vehicle service contracts (VSCs) tailor-made to meet the rougher demands of these vehicles.

John Luckett, senior vice president of sales and marketing, The Warranty Group, expects increased competition in the pickup truck segment as well as the new powertrain combinations being brought to the forefront by manufactures. He thinks that this trend, along with a few others, will lend itself to new product development, and training and underwriting reviews of the products and processes, which are currently being offered in the finance office.

But despite the current price of oil and a corresponding up-tick in truck/SUV sales, Jay Lighter, president, Nitrofill, says, “The quest for fuel efficiency will continue with a growing emphasis on electrics. As for F&I, I think we will continue to see growth in paperless processes and menu driven sales.”

Leasing and Trade-Ins

The explosion of leased vehicles has been on everyone’s radar. With attractive lease terms and prices, the market appeal for leases is expected to increase even further in 2015. Many of the executives we spoke with will be watching this segment of the market.

Bill Gorra, president and CEO, Simoniz USA, Inc., predicts the upward trend in leasing will continue in 2015. “Some experts predict as much as 30% of new car sales will be through leasing. This presents both a challenge and an opportunity. For instance some traditional F&I products may be short circuited by leasing, but products that address things like end of lease charge backs will be well received.”

Leasing is a trend Kelly Price, president, National Automotive Experts, is closely monitoring. “We anticipate it will continue to be strong across the country. The captives have strong lease programs right now – and we do not anticipate this changing in 2015. Leasing is very attractive to the younger (Millennial) buyer because of the quick turn and hassle free ownership, along with the lower payment point.”

“We all know that there is still a good deal of pent up demand when you consider the average age of a vehicle in the US,” noted Dave Duncan, president, Safe-Guard Products, “but there are other variables that will aid in growth for 2015. Leasing is back to pre-financial crisis levels and in 2015 we will see the early part of the wave of lease returns that will take place for the next few years. Leasing will continue to be strong in 2015, so any protection product that speaks to the needs of those customers will see greater acceptance. Lease wear and tear, tire and wheel protection, some bundled programs, and pre-paid maintenance will be the biggest winners.

With regard to trade-ins, as these older cars and leased vehicles return to the market, they may present some challenges in the financing department. Tim Brugh, president, American Auto Guardian, Inc. (AAGI), says, “As used car values continue to decrease, it will increase the difficultly of an F&I department’s ability to obtain a consumer loan. Customers trading their vehicles in will have less equity in those trade-ins, which means the F&I department will need to work much harder to get those loans approved.”

Dealer Consolidation:

As the activity of private equity companies in the auto and F&I industries increases, so does the trend of the big becoming even bigger.

Garret Lacour, CEO, RoadVantage, predicts the trend toward consolidation will continue and will be an interesting one to watch in 2015, as will the increased focus on F&I as a profit center for the dealership. “This, coupled with the CFPB’s ongoing presence, will make both training and compliance more important than ever.”

Jimmy Atkinson, COO, AUL Corporation, believes there will be some interaction worth watching between franchise dealers and independents regarding used vehicle inventories, sales and values. “I think it will be interesting to see how aggressive the larger franchise groups, which are currently in acquisition mode, become in 2015.”

Processes in F&I:

“We need processes that create efficiencies and avoid redundancies by allowing the front end to pick up more of the administrative duties.” Notes Chris Kerby, president of sales and marketing, IAS, “Using technology will be critical in the process to eliminate waiting. We are proactive with eliminating the manual input of data whenever possible. State regulations and lenders stand in the way for a lot of us, but overall, the industry is getting a lot more efficient at eliminating paper through eSignature and eContracting.”

Jimmy Atkinson, COO, AUL Corporation, noted that F&I processes continue to be more streamlined in order to shorten the transaction time in F&I. “Technology can help with this as well as a strong training program to make more succinct and prepared presentations. F&I managers who ‘wing it’ take longer and achieve poor results when compared to someone who develops the skills needed with today’s customers.” Atkinson says technology should complement the process and enhance the presentation – but it can’t replace the holes in a lousy F&I presentation.

Garret Lacour, CEO, RoadVantage, predicts the ongoing presence of the CFPB and FTC will continue to put the spotlight on dealership processes in 2015. “Dealerships need to have a Compliance Management System (CMS) in place, and a big part of that will be processes: formalized documentation of policy management, training, complaint resolution and compliance audits. In January 2015, RoadVantage launched a CMS specifically to help dealerships address and be prepared for what’s coming.”

Technology:

Another trend on the mind of many executives is the expanding reliance on technology as it relates to all aspects of the automotive industry – from the design and manufacture of the vehicle to the retail sale and F&I presentation.

“Technology is evolving quickly and traditional manufacturers are turning to technology companies to design and develop center-stack interfaces for the vehicles,” says Scott Karchunas, president, Protective Asset Protection, “Manufacturers are shifting from designers and developers of these technologies to thoughtful integrators of these technologies. This trend may speed up the evolution to more autonomous, safe, and productive driving. Also, technology is continuing to change the way cars are retailed – beginning with the lead generation process and continuing with a search for a more consumer-friendly and efficient sales process.”

“Technology can be difficult and ‘scary’ because of the unknown,” says Tim Brugh, president, AAGI, “I don’t care who you are, if technology is not your chosen field of expertise you’re going to be hesitant to replace the process you have in place today. I do think that the hesitation is diminishing, with more and more integration for rating, printing and remitting of the contracts between the websites, menu companies and direct ingratiation to the DMS. It has become less of a scary thing to make that change. It’s really about educating the dealership about the time savings and the simplicity of an electronic transaction. Taking that fear out of the process!”

Garret Lacour, CEO, RoadVantage, pointed out the traditional conservative approach of dealerships, when it comes to adopting the advancements offered by new technology, such as online sales, eContracting and online claims adjudication. He says the growing trend to embrace the online customer experience, due in part to the influx of Millennials, will require dealerships to respond. And, as vehicles become more infused with technology, he predicts the F&I offering will evolve to match it.

Kelly Price, president, National Automotive Experts, sees more technology, such as menus, eBusiness, and product presentations in 2015 as a result of better training, more availability and lessoning reluctance over time. “With increasing pressure from the CFPB and other regulators, F&I offices will be forced to adopt more technology to protect the consumer as well as the dealership. Additionally, more buyers demand more efficient, transparent and friendly F&I transactions.”

Dave Duncan, president, Safe-Guard Products, reports seeing increases in vehicle service contract penetration across the industry as technology offerings in vehicles continue to grow. “The key driver seems to be the message to the consumer that technology on their vehicle can be very expensive to replace or repair. It doesn’t require a drivetrain claim anymore to be in the thousands of dollars. F&I managers are doing a much better job illustrating this fact to the customer.”

No doubt, the role played by the Internet and advances in technology will continue to evolve and impact the whole buying and selling landscape. Jim Smith, CEO, SouthwestRe, says this will be especially significant in the F&I department, as the average customer becomes more knowledgeable. “This makes it that much more important for F&I to ‘stay up with the times.’ The days of customers reviewing brochures are being replaced by customers researching products online. As the world shrinks, consumers will expect things much faster therefore it is up to the providers to be able to satisfy these demands and the Internet and technology is the most efficient way.”

Mark Mishler, CEO, Interstate National Corporation, thinks technology will continue to revolutionize the way that dealers interact with finance companies, the consumer and their product providers. “Dealers need to continue to look at ways to streamline their operations with the goal of having a fully automated front-to-back system in their dealership. This would include everything from desking to DMS integration to the menus and eContracting for both the financing of the car and products, to eContracting for service contracts and ancillary products.”

Robert Steenbergh, CEO, US Equity Advantage, LLC, anticipates a burst of activity in technology, but says it is difficult to predict how successful it will be. “I expect continued exploration of tablet-based technologies, customer self-service approaches (with and without F&I personnel assistance), and an attempt to move F&I online. The success of these approaches will depend on the level of PVR profits they produce.”

Matt Croak, president, Wise F&I, also expects the growing trend of online contracting and remittance to continue expansion throughout 2015. He sees technology as a means to improve the customer experience, by “utilizing online resources to provide better customer support.”

“There are dealers experimenting with selling F&I products on dealer websites and having some success,” Steve Amos, president and CEO, GSFS, notes, “The key to this possible new process will be identifying who will be selling F&I products and ensuring they are compliant, and that they know the benefits of the products.”

Technology is streamlining many businesses’ operations through the offering of apps for smart phones and tablets. Jerry Biller, president, EcoProProducts, started the new year with the launch of an app tying their warranties to a service drive VIN scan using an iPhone camera. It is available to both consumers and dealers. Biller says the app makes the claims process easier and faster for both the customer and the dealer by prepopulating warranty data.

Tony Wanderon, CEO, National Auto Care, says the direction and the impact of technology in F&I is a hard call. “Most technology in the F&I office is controlled by a few dominant providers. I could see someone making a hard push at the direct-to-consumer market with a dynamic and aggressive online solution. If you can now pay with a cell phone, why not have all of your preapproved auto loans done that way as well?”

Compliance and the CFPB:

A significant driving factor for the increased use of technology is the CFPB’s continued encroachment into the F&I office. Technology today offers a variety of elegant solutions for protecting customers’ personal data and for keeping dealers’ operations secure and efficient. Many in the automotive industry, especially those in F&I, will be on the look out for the regulators next move.

Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., says, “Compliance methodologies and practices will continue to be a hot topic for all providers and dealers. The compliance experts seem to believe that there very well may be a trend towards standardized, non-discriminatory pricing on all F&I-type products. This year will likely see most industry providers, including lenders and product and service contract providers, continuing to develop compliance processes and pricing strategies to ensure compliance while increasing dealer profits.”

2015 will continue to be all about compliance and the reach of the CFPB according to Robert Steenbergh, CEO, US Equity Advantage, LLC. He would like to see an initiative from within the industry to work with the CFPB so that everyone clearly understands the rules going forward. “This includes collaborative input on the development and scope of these new rules as we understand our business better than anyone else. Otherwise, this increasingly antagonistic ‘us versus them’ mentality will not end. The CFPB does not have to be an adversary when it comes to treating consumers fairly. Conversely, the CFPB should operate more transparently when it comes to dealing fairly with our industry.”

Jimmy Atkinson, COO, AUL Corporation, says he too, will be closely watching as the CFPB progresses in their march on F&I. “It reinforces the need for transparency in our F&I processes and the need for developing a compliance program that reinforces an atmosphere of integrity in our stores.”

With the CFPB’s continued focus seemingly set on dealer reserve, Dave Duncan, president, Safe-Guard Products, says the current model has come under their scrutiny. “The end result could very well produce a reduction in fees to the dealer. Some people are concerned that the CFPB’s next focus will be on F&I products. That would not be a complete surprise. But, if you are a dealer who demands consistent processes that are fully transparent to the consumer at fair prices, you should see an increase in product sales. Keep in mind that there are many perils of ownership of an automobile and F&I protection products help consumers save money, offer them many conveniences and may even contribute to increased safety and security. Many people want to have this coverage and being able to pay for these protection products within the framework of a loan or lease makes them more affordable to the majority of consumers.”

Kelly Price, president, National Automotive Experts, says it is critical for dealers to pay attention to how they handle every single transaction. “Whether it is a transaction dealing with a lender, which menu system they work with, or how an F&I manager presents the products, they must pay attention every step of the way to ensure that they aren’t the next story in Automotive News. Now is the time to look at and refine those processes that will protect the dealership, the F&I department and the profits that come with it.”

Hot Products

It is no surprise that VSCs and GAP are generally expected to hold their spot as the mainstays in F&I. There are, however, a growing number of products that our panel of executives will be watching this year. Unique products, bundled products, and products geared especially for lease and cash customers are on the rise and expected to experience substantial growth, as are products that create loyalty, such as prepaid maintenance.

“Historically,” says Jerry Biller, president, EcoProProducts, “dealers have been comfortable selling the same products they have been selling, but in the last few years new products have been extremely well embraced, indicating a trend in increased desire to have innovative products for the consumer.”

Chris Kerby, president of sales and marketing, IAS, anticipates that any products that add to owner loyalty will be big sellers in 2015. “Maintenance programs, lease wear and tear – anything that hedges depreciation and helps the vehicle maintain its value will be a hot product.”

Jay Lighter, president, Nitrofill, said they are looking for an expansion of products that provide dealers with residual opportunities in addition to a profit earned at the time of the vehicle sale. “In other words, more sophisticated products that marry F&I solutions to service drive and other departmental needs.”

Tim Brugh, president, AAGI, predicts things will be “back to the basics” in the F&I office. “I think 2015 will be all about simplifying the delivery process in F&I. Keeping the number of products to a minimum of VSC, GAP, a form of tire and wheel combo, and one other product that the dealer is most interested in selling. It’s not about how many products we can throw at the consumers but about the transparency of those products. The F&I team can say, ‘Here are the products we believe in at our dealership and here are the prices for these products.’ Consumers have technology at their fingertips, and they know what things cost before and during the sale process. Transparency is an absolute necessity.”

Kelly Price, president, National Automotive Experts, says that while traditional F&I products such as VSCs and GAP protection will remain strong, she expects products that fit the increasing lease trends will be great sellers this year. “Short term service contracts that appeal to lease customers and ancillary products that fit cash and lease transactions will be the product focus for 2015. Products such as our new Shortfall Deposit Discount and Depreciation program are excellent for lease and cash buyers. In addition, appearance protection packages (paint and fabric, windshield, dent and ding) as well as maintenance programs are excellent for both the dealer and the customer. Maintenance ties the customer to the selling dealer for routine maintenance. This is critical to capturing the next vehicle transaction down the road.”

“With the increased accessibility relative to lending,” Matt Croak, president, Wise F&I, predicts, “GAP will continue to play a primary role in most automotive sales that are financed. Appearance care service contracts will provide increased value to the product mix delivered in the F&I office.”

Jim Smith, CEO, SouthwestRe, expects customer loyalty programs to continue to gain support in dealerships, and products that fit in those programs will also gain traction. These are products such as limited and lifetime warranties, prepaid maintenance and appearance and theft protection products – all of which can be incorporated into customer loyalty programs.

Smith recommends F&I departments consider products to complement theft protection such as key replacement. “Especially with the changes in vehicle technology, key replacement is a lot different and more costly than when you had to just stop and get your key duplicated at the local hardware store.”

Scott Karchunas, president, Protective Asset Protection, believes thoughtful, customer-centric products with dealership retention properties will continue to make sense for dealers and consumers. “The service contract will lead the way. However, dealers and consumers are going to look for updated coverages, which integrate the addition of new in-vehicle technology, powertrain, and safety systems. Product bundles will likely continue to grow as dealers look to increase opportunities for customer retention and revenue both at the time of the sale and over the longer term. Also, GAP will continue to be a staple product for the F&I office.”

“Consumers want peace of mind on many levels,” says Steve Rosenvall, CEO, Alpha Warranty Services Inc., “and now they can afford it. With high tech vehicles becoming a standard, a VSC with better high-tech coverage and array of different terms is a must. It’s important to continue catering to these high-tech buying habits and arm the F&I office with the services and products customers’ desire. New technology offered in vehicles will drive the consumer to want protection from these potentially expensive failures. I see a greater desire to cover high-tech vehicle add-ons such as wi-fi devices, Bluetooth technology, infotainment systems, gaming units, etc.  GAP and ancillary bundles are also on the rise and I expect that trend to continue.”

Millennial Shoppers

Millennial shoppers and employees are definitely making their mark in automotive. As the largest generation in the US, Millennials represent around one third of the entire US population. They are the first generation to have access to the Internet in their earliest years of life and are the most culturally diverse and educated generation in history. With their tech-savvy research skills, the generation that didn’t know life before the Internet is causing the automotive industry to rethink and revamp the buying and selling process. Described as impatient, well educated, and technical, Millennials are a leading factor in the push for increased technology and the use of social media when it comes to car sales.

Jimmy Atkinson, COO, AUL Corporation, describes them as having less patience with sales pitches and being more prepared when they enter the dealership. His recommendation for both salespeople and the F&I office is “be armed with solid product knowledge and the ability to listen rather than talk.” He also mentioned the impact of Millennials in the workforce.” Millennial employees are maligned for being lazy but what we find at AUL is that they work hard and can be very engaged. We focus on creating a culture that is friendly, fun and creative that allows all of us to be a part of an extended family. When that happens, you can keep turnover low and employees happy including Millennials.”

“Millennial shoppers are different from older generations,” explained John Luckett, senior vice president of sales and marketing, The Warranty Group. They have more of an affinity for technology, will consider lesser-known brands and are very dependent on research and referrals. They tend to put more credibility on people with firsthand experience than someone with professional credentials. Millennials are all about instant gratification. They put a premium on speed, ease, efficiency and convenience in all their transactions. The other challenge facing Millennials are loan applications that don’t have enough credit history to generate a credit score using traditional methods.”

John Vecchioni, national sales director, United Car Care, says, “If we aren’t continually and constantly training – about sales and the personalities we deal with, we will be left behind. Millennials will come in with all the information. Our job will be telling them why the products in F&I will match up with their purchase. They already have their minds made up, so we have to meet them where they get their research on the Internet. We have to do something different to take down their expectation that they know what we are doing and why we do it. We need to do something different to create more value – a more logical conversation in addition to sharing the features and benefits. It has to make sense to them.”

Millennials are on the verge of becoming the majority consumer, according to Steve Rosenvall, CEO, Alpha Warranty Services Inc. “They have so much technology and data in the palm of their hand, it may prove difficult to convince them that the dealer has everything they want and need for their buying experience. The dealer, product provider and service provider will need to be on the cutting edge of offering more.  A new buying experience, and technology that supports this new experience, will need to be created and refined in order to cater to the next generation of consumers who speak the language of technology.”

Bob Pruitt, president, Cal-Tex Protective Coatings, Inc., says Millennials are more attuned to detailed research before, during, and after a vehicle purchase. “That level of research requires marketing and sales efforts geared towards Internet-friendly products and reputation management along with competitive and consistent pricing and services. The use of interactive ‘Apps’ that inform customers and encourage dealer retention will also become more frequent and effective.”

Mark Mishler, CEO, Interstate National Corporation, however, doesn’t think there is a major difference in the buying habits of Millennials from other consumers. “Today, most everyone still goes into the dealership to purchase the vehicle. This being the case, F&I products will still be sold in the F&I department with very little differentiation on who or what group is purchasing these products. However, if and when the time comes when a car sale transaction will take place utilizing social media and the Internet and the consumer is no longer going to the dealership, then we will have to think of ways to offer F&I products to these consumers.”

“We anticipate the influx of Millennial shoppers positively affecting dealerships that have established a plan for catering to the younger, more technical, more educated and less patient buyer,” says Kelly Price, president, National Automotive Experts, “There has been much publicity, education and buzz in the industry regarding the importance of selling to the Millennial buyer. It will take some time for this to transcend the industry. The automotive industry has proven it takes a while to make whole scale changes. Again, progressive, forward thinking dealerships have a plan to cater to the Millennial buyer – and they will be successful because of that. As it relates to F&I, the processes and presentation must change to successfully sell to the Millennial buyer. Technology is critical to breaking down the barriers. Millennials demand more and the industry must be willing to provide it in order to attain success.”

Jay Lighter, president, Nitrofill, pointed out that with the vast majority of Millennial shoppers seeking new vehicles priced under $20K, value is key, as is their appetite for technology. “Addressing the issues Millennials care about is also important; products that save them time and money, and perhaps positively impact the environment as well, will be in demand.”

Whether Millennials or not, Bill Gorra, president and CEO, Simoniz USA, Inc., pointed out that the customer experience is first and foremost on everyone’s minds. “Building customer loyalty takes long term thinking; the experience the new car buyer takes from the F&I office needs to be pleasant and built on trust.”

And the customer experience really is the bottom line according to all of our executives. Whether you look at the economy, how things are done in F&I, technology or processes, it all boils down to one thing – are the variables in play creating a positive experience for the consumer? Staying relevant through technology and training on products, processes and personalities will pave a profitable path into 2015 and the years to come.

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Atkinson to Deliver Featured Address at Agent Summit


LAS VEGAS — Organizers of the annual Agent Summit have announced that Jimmy Atkinson, COO of AUL Corp., will present a featured address for the 2015 event, which will be held March 2–4 at the Venetian Palazzo Las Vegas.

“Jimmy is as well-respected in agency circles as any executive in our industry today,” said David Gesualdo, show chair and publisher of Agent Entrepreneur and F&I and Showroom. “He brings a veteran presence to our stage and we look forward to his presentation.”

Atkinson has tentatively titled his speech “Selling to Dealers,” and he is expected to touch on several elements critical to the success of agencies, including product penetration and dealer development.

Randy Crisorio, president and CEO of United Development Systems Inc. (UDS) and chair of the Agent Summit advisory board, said he expects Atkinson to find a receptive audience at the event.

“‘Selling to Dealers’ is undoubtedly the critical piece in personal growth,” Crisorio said. “Training, Coaching and Technology have no role until we acquire a dealer client, and Jimmy is perfectly suited by time and success to address the Agent body.”

To register for Agent Summit or for more information, visit AgentSummit.com. Attendees who register by Feb. 1 will receive a $100 early-bird discount. For sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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